Term Insurance: A Must-Have For Parents

If you are a parent or parent-to-be, you need to buy term insurance for yourself as you hold the responsibilities of providing a better future to your child with or without you being around.

In this article, you will get an in-depth idea as to why term insurance for parents is essential, what are its benefits, features, and more.

What Is Term Insurance?

Term insurance is the purest form of insurance that you can buy for yourself and secure the future of your family after your untimely demise. It is a life insurance policy that provides financial coverage to the nominee in the policy if the life insured dies untimely.

Among all the life insurance policies, Term insurance offers the highest coverage with minimal premiums. Some companies also cover the partial or permanent disability of the insured. Term insurance is the only plan that comes under pure risk.

Need Of Term Insurance For Parents

A term insurance policy protects and financially covers the family in case of the untimely demise of the insured. A term insurance plan, sometimes even cheaper than a smartphone, is a great cost-effective way to secure the future of your family in unexpected times.

If you are a parent, then it is extremely important for you to buy a term insurance plan not just for your child’s future but also for your safe and tension-free future.

Key Features Of Term Insurance

Benefits Of Term Insurance

Here are some key features of term insurance that will help you get a better understanding of the plan and help you choose it wisely.

1. Easy To Understand Than Other Policy Plans

   Buying a term plan is comparatively easy than any other plan. The framework of the term plan is comparatively very easy. There are no deep clauses or terms and conditions when term insurance is involved. It is an easy, hassle-free, and simple plan as there are no investments or saving clauses involved. One needs to pay the premiums on time and the insurance provides cover and benefits during that duration.

2. Easy To Cancel

   As easy as to start, it can be canceled as well. As there are no investment or premium benefits involved in the plan, it is easy to stop anytime you want.

3. Lower Premium

   A term plan is much cheaper than your one-time fancy restaurant bill. Believe it or not but it is true. As there are no high investment components involved, term insurance is available at very affordable premium rates as per your annual income and age.

4. Higher Sum Assured

   Imagine putting 5% effort into your work and getting promoted by your boss. Sounds fascinating right? Term insurance is a kind of plan where at a very minimal premium you can get high coverages. If you choose the correct insurance plan, your loved one will surely benefit from it when you are not there.

5. Financial Security

   It is big-time financial security for your loved ones once you are not around to look after them anymore. It provides financial protection to the family and takes care of the liabilities in your absence. Don’t hesitate to buy it for your family’s better future when you are not around.

6. Customizable

   The policy period, coverage, payment options (whether monthly, annually, lump-sum) depends on you. You can customize it as per your suitability.

7. Critical Illness Coverage

   We know that the treatment of expenses incurred during a critical illness can be exhausting physically, mentally, and most important financially. As the critical illness in life is not predictable, a term insurance plan works wonders during this testing time. It is highly recommended to avail of critical illness coverage benefit in your term plan, as you never know what lies in the future. 

8. Ultimate Tax Benefits

   All the premiums you pay are tax-exempted under Section 80C. With critical illness cover, you can also avail additional tax benefits*.

   * Tax benefit is subject to changes in tax laws

Eligibility Criteria

The eligibility criteria to buy a basic term insurance plan is as follows:

Disclaimer: The aforementioned eligibility criteria are generic and may vary with the insurer. Please check with your insurer about the exact eligibility criteria for its term insurance plan.

Term Insurance Premium Payment Options

Depending on the payouts, the premium amount may differ. If you opt for increasing sum assured premium increases over a period as compared to the level sum assured. There are three premium payout options available under term insurance plans:

1. Regular Pay

   In this, assured is required to pay premiums periodically for the complete policy period. You can select yearly, half-yearly, or monthly options to pay premiums. 

2. Limited Pay

   Assured can make recurring payments for a pre-decided limited time. In this, the premium payment term is less than the policy term.

3. Single Pay

   This option allows assured to pay the complete premium amount at once during the time of policy purchase.

Rider Benefits

Riders strengthen the term insurance policy by providing multiple additional benefits. There are mainly six types of riders under a general term insurance plan

• Accidental Death Benefit Rider
• Accelerated Death Benefit Rider
• Accidental Disability Benefit Rider
• Critical Illness Benefit Rider
• Waiver of Premium Rider
• Income Benefit Rider

Conclusion

As much as for a child, a term insurance plan is equally important for a parent.

Term insurance for parents is invaluable and should be bought for a bright and safe future. Life is unpredictable and one should always be prepared for any unforeseen situations that the future holds. Therefore, one should make wise decisions and choose a good term insurance policy.